P1 billion Kalinga loan stopped

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TABUK CITY – A local court ordered the provincial government and the Land Bank of the Philippines (LBP) to cease and desist from implementing the assailed P999 million loan agreement after a former official questioned the aforesaid deal.

In a status quo order, the Regional Trial Court (RTC) Branch 25 directed the government bank not to release any amount from the loan previously applied for by the provincial government amounting to close to P1 billion until further notice that will be handed down.

The case stemmed from the complaint filed by former Vice governor James Edubba for the annulment of the loan agreement with prayer for the issuance of a temporary restraining order (TRO) and a writ of preliminary injunction to prevent the loan process from being realized while the court will hear the legality of the same.

Further, the court ordered the provincial government and the LBP to maintain a status quo or the condition prevailing prior to the filing of the said case and the same will remain valid until the court will act on the prayer for the issuance of the prayed writ of preliminary injunction.

The court scheduled the next hearing of the case on January 11, 2022 where both parties will be given the chance to argue their respective positions on the questionable loan by the provincial government.

Earlier, Edubba prayed for urgency in the disposition of the complaint after the bidding process for the different projects under the loan agreement was conducted early this month.

In July, the LBP disclosed that the loan, which will be given in cash to the local government, is under the restoration and invigoration for a self-sufficient economy towards up growth for local governments lending program that was launched in July 2020 that aims to support local government units in implementing their economic stimulus plans geared towards reviving the COVID-19 affected economy.

Records showed that Gov. Ferdinand Tubban was authorized by the provincial board to negotiate the loan with the government bank on May 11, 2021.

In order to secure the loan, the provincial government agreed to use 20 percent of its annual internal revenue allotment (IRA) averaging P260 million to pay for the loan up to 15 years.

However, Edubba, who represented himself with the court as a taxpayer, pointed out that the assignment of the IRA is ultra-vires or beyond the powers of the local officials since it will deprive persons who will succeed them of the use of that part of the IRA for their desired priority development projects.

According to him, the 20 percent IRA to be used as loan payment is traditionally allocated for sectoral services such as for agriculture, health, social welfare and development, salary for casual and project employees, and funding for barangay projects among others which means that there will be surely budget cuts to serve the said sectors until such time that the loan is paid within the 15-year period.

The former vice governor alleged that bulk of the questioned loan is devoted to projects outside the purpose of the loan such as the P539 million earmarked to partially finance the improvement of 3 provincial roads.

In the case of the Bulanao-Laya-balong provincial road streetscaping project worth P300 million, he argued that the same is simply for beautification of an already concertized and developed road.

Edubba stipulated that the said amount should be allocated for concreting of farm to market roads in undeveloped areas in upland towns of the province which are classified as provincial roads.

Edubba asserted that infrastructure projects in such magnitude can be provided with funds without entering into loans as they have previously done during their incumbency with former Gov. Jocel Baac that resulted to the implementation of numerous infrastructure projects in the remote areas of the province that paved the way for rural development.

Various groups in the different parts of the province earlier expressed their vehement opposition to the questioned loan agreement, citing it is not morally right to make future leaders pay for the loan obtained by the present batch of local officials as they will not be able to implement their desired pace of development for Kalinga in the future.

By Hent